1. Determine Cost Assignment
Show Slide #1: Determine Cost Assignment
Title: Determine Cost Assignment
References:
DFAS-IN Regulation 37-1, Finance and Accounting Policy Implementation
DFAS-IN MANUAL FY, The Army Management Structure
GFEBS Performance Support Website (PSW)
Section I. Administrative Data
Academic Hours/Methods
01 hrs. / 00 min. DSL (small or large group discussion)
02 hrs. / 20 min. PE (Practical Exercise)
00 hrs. / 00 min. Test
00 hrs. / 00 min. Test Review
03 hrs. / 20 min. Total Hours
Section II. Introduction:
Method of Instruction: DSL - Discussion (large or small group)
Facilitator's to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 05 min.
Media: PowerPoint Presentation
Facilitator Material: Each primary facilitator should possess a lesson plan, evaluation sheet, scenario event list for exercises, and summary sheet containing the above noted references.
Learners Material: Learners should possess course handouts, access to all systems for exercises, summary sheet containing the above noted references portable laptop, and standard classroom supplies.
Note: "All required references and technical manuals will be provided by the local Command“
Motivator (Concrete Experience): As Financial Managers using the Cost Assignment Method you will be able to define sender receiver relationships and assign costs to the appropriate cost object.

2. Terminal Learning Objective
Actions: Determine Cost Assignment
Conditions: You are a Budget Analyst with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors
Standard: With a minimum of 80% accuracy, learners must demonstrate proficiency with:
Identify Cost Assignment Methods
Perform a Direct Activity Allocation
Show Slide #2: Terminal Learning Objective
Facilitator’s Note: Read/State the TLO
Actions: Determine Cost Assignment
Conditions: You are a GFEBS data processor with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors
Standard: With at least 80% accuracy:
- Identify Cost Assignment Methods
- Perform a Direct Activity Allocation
Safety Requirement: In a training environment, leaders must perform a risk assessment in accordance with DA PAM , Risk Management. Leaders will complete a DD Form 2977 RISK MANAGEMENT WORKSHEET during the planning and completion of each task and sub-task by assessing mission, enemy, terrain and weather, troops and support available-time available and civil considerations, (METT-TC). Local policies and procedures must be followed during times of increased heat category in order to avoid heat related injury. Consider the work/rest cycles and water replacement guidelines IAW TRADOC Regulation
Risk Assessment Level: Low.
Environmental Considerations: Environmental protection is not just the law but the right thing to do. It is a continual process and starts with deliberate planning. Always be alert to ways to protect our environment during training and missions. In doing so, you will contribute to the sustainment of our training resources while protecting people and the environment from harmful effects. Refer to FM Environmental Considerations and GTA ENVIRONMENTAL-RELATED RISK ASSESSMENT.
Evaluation: You will be given a graded 25 question exam, which will cover this task. A passing score on the exam is 80%.
Instructional Lead-in. (Publish and Process): To Determine Cost Assignment Method is a course designed to help you, the Finance Manager understand the relationship/the connection between assigning costs to Sender/Receiver as defined by GFEBS. This course consist of the following topics:
- Cost Assignment Methods
- How Cost Assignment are used
- What Cost Assignment show
- The Benefits of Cost Assignment
Budget vs. Non-budget relevant cost
Cost Allocation
Assignment and Distribution methods
What is Allocation Template

3. Key Terms Associated with Cost Assignment
Overhead
Overhead Rows
Base Rows
Calculation base
Direct Activity Allocation
In-Direct Activity Allocation
Distribution
Credit Object
Assessment
Non Budget relevant Cost
Show Slide #3: Key Terms Associated with Cost Assignment
Section III. Presentation.
Learning Step / Activity 1. Identify Cost Assignment Methods
Method of Instruction: DSL (large or small group discussion)
Facilitator's to Learner Ratio: 1:25
Time of Instruction: 01 hrs. / 00 min.
Media: PowerPoint Presentation, Handout
Facilitator’s Note:
Listed above are the follow are Key Terms associated with Determine Cost Assignment:
- General Ledger (G/L) Account: Activity Types categorize a production or service output provided from one Cost Center to another for use in Internal Activity Allocations. Activities are assigned rates to be used during Activity Allocation.
- Non-budget relevant cost: Costs that do not have a direct effect on fund, functional area, funded program, or budget. For example: Military Labor, Leave Liability, Contract Labor, or Direct Activity Allocations within the same Fund and Functional Area.
- Assessment: A type of cost allocation that provides summary level detail of primary and secondary costs.
- Distribution: A type of cost allocation that provides line item detail of primary costs.
- Direct Activity Allocation: An allocation method where activity quantities are known and allocated based on a rate defined for the activity type.
- Indirect Activity Allocation: An allocation method where Activity quantities are not known. They are determined by the system based on receiving tracing factors, weighting factors, or fixed quantities. Once the quantity is entered, allocation between sender and receivers takes place.
- Base Rows: Defined by assigning a calculation base, so that they contain the direct costs that are to have overhead applied to them during the overhead costing.
- Calculation Base: Defines the primary cost elements to which a particular overhead is to be applied. This represents a group of cost elements to receive overhead charges. For each controlling area, one can assign individual cost elements or cost element intervals and individual origins as well as origin intervals to the calculation bases.
- Credit Object: A credit object is the object that will be credited. If an object in actual data is debited with overhead, then another object (such as, a cost center, or order) is credited at the same time. The overhead is recorded using a unique overhead cost element.
- Overhead: The overhead rate determines to what extent the percentage-based or quantity-based overhead rate should be applied to the direct costs. It also specifies under which conditions the overhead rate is to be applied.
- Overhead Rows: An overhead row consists of a base row or a totals row. The overhead amount is calculated by multiplying the amount contained in these rows by the overhead rate. The overhead rows also contain an offset key. The offset key determines which method of allocation is followed (percentage or quantity-based).
General Ledger (GL) Account
Cost Assignment

4. Identify Cost Assignment Methods
Cost assignment is the movement of costs from sender cost objects to receiver cost objects. Cost assignment methods are the mechanisms for moving costs.
Sender
Receiver
Cost
Object
Cost
Object
Cost
Object
Cost
Object
Show Slide #4: Identify Cost Assignment Methods
NOTE: Learners should refer to summary sheet, Cost Assignment Methods during this lesson.
NOTE: Some explanations for the students.
Cost Assignment Methods: Assignment Methods are the movement of costs from sender cost objects to receiving cost objects. Using the cost assignment process is essential to accomplish performance and output objectives. The cost assignments methods chosen and the cost objects selected form the foundation for analysis and enable management to make informed decisions.
How are Cost Assignments Used? Cost Assignments are used to define sender receiver relationships and assign costs to the appropriate cost object. Understanding an organization’s mission, strategic plan, and operational environment is essential to selecting the right cost objects and designing the cost assignment method.
Cost
Object
Cost
Object
Understanding an organization’s mission, plan and operational environment is essential to selecting the right cost objects and designing the cost assignment method.
Cost Objects/Funded Program: Cost Centers, Internal Orders, WBS Elements and Business Processes 4

5. Cost Assignment Results and Benefits
Cost assignments allow for greater visibility of what cost each business object is incurring for goods and services.
- Allows the operational and resource managers to manage costs.
The main benefits of Cost Assignments are:
-Gives a full costing view
-Enable users to choose the type of assignment most appropriate for their organization.
-Enable users to set up predefined assignment rules.
Show Slide #5: Cost Assignment Results and Benefits:
Facilitator’s Note:
What do Cost Assignments Show? Cost assignments allow greater visibility of what cost each business object is incurring for goods and services. This allows the operational and resource managers to manage costs. The main benefits of Cost Assignment are:
- A full costing view by assigning costs to the cost object which consumed the resource.
- Enables users to choose the type of assignment that is most appropriate for their organization.
- Enables users to set up predefined assignment rules.

6. Budget vs. Non-Budget Relevance Cost
Budget Relevant Cost
Cost transactions that either increase or decrease fund availability as
Determined by the cost object’s association with a budget relevant commitment
Item (e.g., Labor Cost).
Non-Budget Relevant Cost
Cost transactions that have no impact on funds availability as determined by
The cost object’s association with a non-budget relevant commitment Item
(e.g., Business Process Allocation).
Show Slide #6: Budget VS. Non Budget Relevance Costs:
Facilitator’s Note:
Budget vs. Non budget Relevant Cost: The following are Cost Transactions that are Budget Relevant or Non-Budget Relevant.
- Budget Relevant: Cost transactions that either increase or decrease funds as determined by the cost object’s association with a budget relevant commitment items.
- Non-Budget Relevant: Cost transactions that have no effect on funds availability as determined by the cost object’s association with a non-budget relevant commitment item.

7. Cost Allocations Cost Allocation Type Description
Is a process of providing relief to shared service organization's cost centers that provide a product or service.
The associated expense is assigned to receiving cost centers that consume the products and services.
In GFEBS there are two (2) main types of Cost Allocation:
Cost Allocation Type
Description
1. Value-Based Allocation
Involves allocating actual dollar
amounts.
Show Slide #7: Cost Allocations:
Facilitator’s Note:
Cost Allocations: Is a process of providing relief to shared service organization's cost centers that provide a product or service. In turn, the associated expense is assigned to receiving cost centers that consume the products and services. In GFEBS, there are two main types of cost allocations:
- Value-based Allocations (Assessment Distribution. Etc.); Involve allocating actual dollar amounts.
- Quantity-based Allocations: Involve allocating a quantity, which is usually hours or some type of activity.
2. Quantity-Based Allocation
Involves allocating a quantity
which is usually hours of some
type of activity

8. Cost Assignment Methods
Assessment
Distribution
Direct Activity Allocation
Indirect Activity Allocation
Template Allocation
Target = Actual Allocation
Show Slide #8: Cost Assignment Methods:
Facilitator’s Note:
Cost can be assigned to receiving objects using the following methods:
- Assessment: A type of cost allocation that provides summary level detail of primary and secondary costs. (Value Based)
- Distribution: A type of cost allocation that provides line item detail of primary costs. (Value Based)
- Direct Activity Allocation: An allocation method where activity quantities are known and allocated based on a rate defined for the activity type. (Quantity Based)
- Indirect Activity Allocation: An allocation method where Activity quantities are not known. They are determined by the system based on receiving tracing factors, weighting factors, or fixed quantities. Once the quantity is entered, allocation between sender and receivers takes place. (Quantity Based)
- Template Allocation: An allocation method for cost centers, activity types, and business processes that uses a template with weighting factors such as rates and percentages. (Quantity Based)
- Target = Actual Allocation: A form of Indirect Activity Allocation using planned activity inputs based on the operating rates of the cost centers (Quantity Based)
Highlighted in Dark Blue are functionalities that the Army is presently using or will use in
the future.

9. Assessment and Distribution
Is a method of assigning both primary and secondary costs in Cost Center Accounting.
Helpful when viewing summarized view of the costs.
Original cost elements are grouped together cumulatively for assessment.
Sender and Receiver information appears in the controlling document.
Assessment
Show Slide #9: Assessment and Distribution:
Facilitator’s Note:
Assessment is a method of assigning both primary and secondary costs in Cost Center Accounting. Using Assessments is helpful when the user would only like to see a summarized view of the costs. The following is passed to the receiving elements:
- The original cost elements are grouped together cumulatively for assessment. Original cost elements are not displayed on receivers.
- Sender and Receiver information appears in the Controlling document.
Cost Center Accounting lets you analyze the overhead costs according to where they were incurred within the organization.
NOTE: Review Next VG with students. A Look at a DOL Food Services Division doing an assessment.

10. Food Service Assessment (Sender / Receiver Relationship)
Name CE
Amount
Labor BB
1,325,000
Food
1,500,000
Facility Cost
80,000
DOL Dining
Facility 1
2,905,000.00
Cost Element Grouped together = The
Total Operating Cost of Facility
Show Slide #10: Food Service Assessment (Sender / Receiver Relationship)
Facilitator’s Note:
NOTE: Ref to VG# 10 Example of Assessment Used (Discuss with students)
One example of how an assessment is used could be at the Department of Logistics (DOL) Food Services Division and its Dining Facilities. The sender/receiver relationship defined here would have the DOL Food Services Division a sending a percentage of its operating costs to the Unit or Brigade based on their use of the Dining Facilities. The statistical key figure for this assessment would be headcount. Each unit would receive a portion of total operating cost based on the number of soldiers using the Dining Facility.
DOL Dining Facility 1 sending a % of its operating costs to the Unit or Brigade based on use of Dining Facilities.
SKF for this assessment would be headcount.
Each unit receive a portion of total Op. Cost based on the number of Soldiers using the facility

11. Food Service Assessment (Sender / Receiver Relationship Cont.)
Statistical Key Figure (Headcount)
Total Number of Troops=20,000
1st Brigade/CC1=5,000 represents 25%
2nd Brigade/CC2=10,000 represents 50%
3rd Brigade/CC3=5,000 represents 25%
Receivers
Name
Cost Element
Amount
Head Count
1st Brigade
CC1
DOL Dinning
Facility 1
$726,250.00
5,000
=2,905,000.00
Show Slide #11: DOL Assessment Method- Receiver (Continue):
Facilitator’s Note:
Again, The statistical key figure for this assessment would be headcount. Each unit would receive a portion of total operating cost based on the number of soldiers using the Dining Facility.” We will look next at the Distribution with Square Footage as the SKF.
2nd Brigade
CC2
DOL Dinning
Facility 1
$1,452,500.00
10,000
3rd Brigade
CC3
DOL Dinning Facility 1
$726,250
5,000

12. Distribution Distribution
Distribution: Is a method of cost assignment used when a GFEBS user seeks to reassign primary costs from one cost center to another on a line item basis.
Gives a line-by-line view of cost element data.
Distribution
Show Slide #12: Distribution
Facilitator’s Note:
Distribution: Distributions are a method of cost assignment used when a GFEBS user seeks to re-assign primary costs from one cost center to another on a line item basis. Distributions are helpful if the user would like to see a line-by-line view of cost element data.

13. Distribution Example
SKF used is Sq. Ft. and Sq. Ft. is our Allocation Basis.
The three units/CC’s occupy a 10,000 Sq. Ft. building.
Total Operating Cost to be distributed on a line item basis to the three cost centers are:
Labor: 1,540,000.00
Utilities: 40,000.00
Rent: 1,500,000.00
For a Total Operating Cost of: 3,080,000.00
Show Slide #13: Example of Distribution:
Facilitator’s Note:
In this distribution scenario, IMCOM would be sending line item detail. For example, R&D MEDCOM, R&D ATEC, and Schools MEDCOM all reside on the same IMCOM installation. Each command represents a cost center. All Three cost centers occupy space in this same 10,000 square foot building. The distribution would post facilities charges as separate line items, citing costs for elements labor, utilities, and rent. Square footage is our allocation basis but note that, instead of incorporating facilities charges into one aggregated posting, each cost posted separately is a expense account.
Sender/Receiver Relationship is established to pass cost from the
Sender Cost Center to the Receiving Cost Centers.

14. Distribution Example (Cont.)
Statistical Key Figure (Square Feet)
Total Sq. Ft. =10,000
R&D MEDCOM (CC1) occupy 5000 Sq. Ft. or 50%
R&D ATEC (CC2) occupy 500 Sq. Ft. or 5%
Schools MEDCOM (CC3) occupy 4500 Sq. Ft. or 45%
In our distribution scenario, the three Units/Cost Centers will receive a percentage of cost on a line item basis.
Cost to be distributed is again:
Labor: 1,540,000.00
Utilities: 40,000.00
Rent: 1,500,000.00
Show Slide #14: Example of Distribution (Cont.)
Facilitator’s Note:
NOTE: Review information om the VG with the students.
The distribution would post facilities charges as separate line items, citing costs for elements labor, utilities, and rent. Square footage is our allocation basis but note that, instead of incorporating facilities charges into one aggregated posting, each cost posted separately is a expense account.

15. Distribution Example (Cont.) Sender / Receiver Relationship
Sender Cost Center (CC): IMCOM
Receiver CC’s: R&D MEDCOM, R&D ATEC and School MEDCOM
Sender
Cost Element
Amount
Receivers
IMCOM
1,540,000.00
R&D MEDCOM
Utilities
Labor
40,000.00
R&D ATEC
Rent
1,500,000.00
School MEDCOM
Show Slide #15: Example of Distribution- Sender/Receiver Relationship (Continue):
Facilitator’s Note:
NOTE: Review with the students.
Each Cost Center to received a percentage of cost based on SKF (Sq. Ft.). Also, The Sender is credited 100% of the cost and the Receivers are debited 100%
of the cost.
Each Cost Center to received a percentage of cost based on SKF (Sq. Ft.)
The Sender is credited 100% of the cost and the Receivers are debited 100%
of the cost.

16. Distribution Example (Cont.) Receiver
(Receiver) Distribution to R&D MECOM/CC1
Receiver
R & D MEDCOM
Cost Element
Sq. Ft. Occupied
Percentage of Sq. Ft.
Amount
Labor BB
5000
50%
$770,000.00
Utilities
$20,000.00
Rent
$750,000.00
Show Slide #16: Example of Distribution- Receiver (Cont.)
Facilitator’s Note:
Example of Distribution: Each Cost Center receives a percentage of operating cost base on the amount of Sq. Ft. they occupy.
Labor Cost Total = 1,540,000.00
R&D MEDCOM 50% = of the 10,000 Sq. Ft Facility = 770,000.00
R&D ATEC 5% = of the 10,000 Sq. Ft Facility = 77,000.00
Schools 45% = of the 10,000 Sq. Ft Facility = 693,000.00
Utilities Cost Total = 40,000.00
R&D MEDCOM 50% of the 10,000 Sq. Ft. Facility = 20,000.00
R&D ATEC 5% of the 10,000 Sq Ft. Facility =
Schools 45% = of the 10,000 Sq. Ft. Facility = 18,000.00
Rent Cost Total = 1,500,000.00
R&D MEDCOM 50% of the 10,000 Sq. Ft. Facility = 750,000.00
R&D ATEC 5% of the 10,000 Sq. Ft. Facility = 75,000.00
Schools 45% of the 10,000 Sq. Ft. Facility = 675,000.00
Distribution made using Sq. Ft as a basis of the allocation. Each Cost Center receives a percentage of operating cost base on the amount of Sq. Ft. they occupy.
Notice the difference in the Assessment Cycle and the Distribution Cycle:
Assessment: Original cost elements are grouped together cumulatively for assessment.
Distribution: Cost is distributed on a line item basis showing the Labor, utilities, and rent line by line.
(Receiver) Distribution to R&D MEDCOM/CC1
Total Debited amount
$1,540,000.00

17. Distribution Example (Cont.) Receiver (Cont.)
(Receiver) Distribution to R&D ATEC/CC2
Receiver
R & D ATEC
Cost Element
Sq. Ft. Occupied
Percentage of Sq. Ft.
Amount
Labor BB
500 5%
$77,000.00
Utilities
$2,000.00
Rent
$75,000.00
Show Slide #17: Example of Distribution- Receiver (Cont.)
Facilitator’s Note:
Receiver: Distribution to R&D ATEC/CC2
154,000.00
Total Debited amount

18. Distribution Example (Cont.) Receiver (Cont.)
(Receiver) Distribution to School MEDCOM/CC3
Receiver
School MEDCOM
Cost Element
Sq. Ft. Occupied
Percentage of Sq. Ft.
Amount
Labor BB
4500
45%
$693,000.00
Utilities
$18,000.00
Rent
$675,000.00
Show Slide #18: Example of Distribution- Receiver (Cont.)
Facilitator’s Note:
Receiver: Distribution to School MEDCOM/CC3
1,386,000.00
Total Debited amount

19. LSA #1 Check on Learning
Q1: M/C Cost assignment methods are the mechanisms for:
a. Increasing costs.
b. Decreasing costs
c. Moving costs
A1: Moving Costs
Q2: T/F: The Assessment method is a type of cost allocation that provides summary level detail of primary and secondary costs.
A2: True (Ref: slide 8)
Show Slide #19: LSA #1 Check on Learning
NOTE: Read and ask the following check on learning question and facilitate discussion on answers given.
NOTE: The answer to each question will appear when you hit enter.
Q: Cost assignment methods are the mechanisms for:
a. Increasing costs.
b. Decreasing costs
c. Moving costs
A: Moving costs
Q: T/F: The Assessment method is a type of cost allocation that provides summary level detail of primary and secondary costs.
A: True (Ref: slide 8)

20. LSA #1 Summary Show Slide #20: LSA #1 Summary
On the first part of the lesson, we identified Key terms as it relates to Cost Assignment. We also discussed the six Cost Assignment methods with definitions. We went over the benefits of those methods, and talked about budget v. non-budget relevant costs. Finally, we discussed cost allocations
“Or”
NOTE: Have one learner from each group to explain the most important take away to them from this lesson. Facilitate a discussion on each answer.

21. Conduct Practical Exercises
PE-101
Show Slide #21: Conduct Practical Exercise (PE101):
Perform an Allocation from IMCOM to Three Receiving Cost Centers (Assessment): Determine Cost Assignment.
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 20 min.
Media: Printed Reference Material, Practical Exercise, Handout
General Information: (Introduction / Objective) this practical exercise simulates a scenario that measures your ability to properly generate the following reports in GFEBS;
Cost by Report, Unit Cost Report, Actual Plan/Variance Report, Display Actual Cost Line Item for Cost Center.
Special Instructions: N/A
Facilitator’s Note: Issues the PE and then go over it with the student’s.
Answer Key:
Practical Exercise PE101: Total Cost to be allocated from IMCOM (Sender) to The Three Cost Centers (Receivers) = 600,000
Q: What is the Basis of our allocation?
A: Square Footage
Q: What is the allocation for Cost Center #1?
A: 300,000.00
Q: What is the allocation for Cost Center #2?
A: 30,000.00
Q: What is the allocation for Cost Center #3?
A: 270,000.00
Q: What is the amount that IMCOM is credited?
A: 600,000.00
Q: What is the amount that the Three Receiving Cost Centers are debited?
Assessment

22. Conduct Practical Exercises
PE-102
Show Slide #22: Conduct Practical Exercise (PE102):
Perform an Allocation from IMCOM to three receiving Cost Centers (Distribution): Determine Cost Assignment.
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 20 min.
Media: Printed Reference Material, Practical Exercise, Handout
General Information: (Introduction / Objective) this practical exercise simulates a scenario that measures your ability to properly perform a Distribution Allocation in GFEBS;
Special Instructions: N/A
Facilitator’s Note: Issues the PE and then go over it with the student’s.
Facilitator Note: Issues the PE and then go over it with the student’s.
Answer Key
Q: What is the Sq. Ft. Occupied by R&D MEDCOM? A:
Q: What percentage of Sq. Ft. do they occupy?
A: 35%
Q: What is their distribution for Labor?
A: 175,000.00
Q: What is their distribution for Custodial Services?
A: 10,500.00
Q: What is their distribution for Utilities?
A: 15,750.00
Q: What is their distribution for Rent?
A: 157,500.00
Questions:
Q: What is the Sq. Ft. Occupied by R&D ATEC? A:
A: 25%
A: 125,000.00 A:
A: 11,250.00
A: 112,500.00
Q: What is the Sq. Ft. Occupied by School MEDCOM? A:
A: 40%
A: 200,000.00
A: 12,000.00
A: 18,000.00
A: 180,000.00
Distribution

23. Perform a Direct Activity Allocation
Sender: MEDCOM Receiver: Project A, B, and C Example of Direct Activity Allocation (Steam):
Plan to used 200,000 BTU’S
Of Steam
Steam Used
Project A
40%
Receives 40% of Planned Consumption
80,000 BTU’s
Project B
30%
Receives 30% of Planned Consumption
60,000 BTU’S
Show Slide #23: Perform a Direct Activity Allocation
Learning Step / Activity 2. Perform a Direct Activity Allocation
Method of Instruction: DSL (large or small group discussion)
Facilitator's to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 00 min.
Media: PowerPoint Presentation, Handout
NOTE: Learners should refer to any notes and/or summary sheets during this lesson.
NOTE: Facilitator will press enter to expose individual sections of the VG, one by one.
Facilitator's Note:
Direct Activity Allocation: In direct activity allocation, activity output is measured, entered, and assigned. These tracing factors are known as activity types. Create the corresponding measurable tracing factors (units of measure for cost occurrence) in GFEBS. For example, activity allocation begins by confirming work or recording activity data. GFEBS multiplies the activity by the price rate for the activity type. If the receiver is not a cost object (for example, cost center, business process or internal order) and no manually-set price exists, the plan price is used. If you do not make iterative price calculations, GFEBS uses the version plan/actual set price for direct activity allocation. If the receiver is a cost object (for example, a production order or a product cost collector), then the price in the valuation is determined based on the valuation variant. The valuation variant is linked to the cost object through the costing variant for the costing. The planned price for the period is used if the receiving cost object is not tied to a costing variant for the costing. If the receiver is a cost object (for example, a production order or a product cost collector), then the price in the valuation is determined based on the valuation variant. The valuation variant is linked to the cost object through the costing variant for the costing. The planned price for the period is used if the receiving cost object is not tied to a costing variant for the costing.
Continuing with the MEDCOM steam scenario, the planned steam usage will drive the actual steam usage. For example, if project A is planning to use 80,000 BTUs for the month and its consumption percentage is 40%, it would receive 40% of the total steam cost. Consumption percentage is derived by dividing planned consumption per project by the total planned consumption. (Describe the Direct Activity Allocation method and walk through the example.)
Project C
30%
Receives 30% of Planned Consumption
60,000 BTU’S
Measurable Tracing Factors is Steam in BTU’S

24. Overhead Example Costing Sheet Costing Sheet MNT001 Base Referring to
Cost Center & Act. Ty
(M001)
Quantity-Based
Overhead Rate
(M002)
Credit
(M01)
Cost Center
Maintenance
(2ABMP200)
Activity Type allocation
Posts $35 to work order
For every hour Employee
Charges to Work Order
Costing Sheet posts
$3.50 Material
Surcharge to Work Ord.
For every hour of labor
Posted to Work Order
Cost Center
Supply Warehouse
(2ABMP206)
Activity Type Main.
Post $35 + Supply WH
Post $3.50 = $38.50 to Work Order
Work Order Maintenance
( )
Is Created
Show Slide #24: Overhead Example
Facilitator’s Note:
NOTE: Facilitator will press enter to expose individual sections of the VG, one by one.
NOTE: Review Overhead Costing Sheet with students.
Basically, Overhead costs are costs which can only indirectly be attributed to the product, such as electricity or general storage costs. We can allocate these overhead costs in various ways. In the conventional method, overhead is applied to the reference object as a percentage rate or a quantity-based rate. The overhead is applied by means of costing sheets. The very purpose of using a cost sheet is that we want to apply indirect costs to the final cost of the product or process.
The Performer (Receiver) is credited and the Requester (Sender) is
debited (If 3 hours of Labor were charged 3 X =

25. Costing Sheets (Cont.)
Pass overhead costs from one cost object to another.
GFEBS uses a costing sheet as the means of calculating overhead.
Are executed at the end of a designated period.
This approach defines a basis for overhead calculation by way of a base times rate calculation.
Four steps in building the Costing Sheet:
-Define Bases referring to Cost Center and Activity Types (Overhead) (T-Code: KZB4)
-Define Quantity Based Overhead Rates (Overhead Rate) (T-Code: KSM2)
-Define Credits (Sender Cost Object) (T-Code: KZE2)
-Define Costing Sheet (Costing Sheet) (T-Code: KZS2)
Overhead is then calculated based on the percentage of the base.
Show Slide #25: Costing Sheets (Cont.)
Facilitator’s Note:
Costing Sheets: A Costing Sheet will pass overhead costs from one cost object to another. GFEBS uses a costing sheet as the means of calculating overhead. This approach defines a basis for overhead calculation by way of a base times rate calculation. Costing Sheets are executed at the end of a designated period. A cost object cannot be assigned to more than one Costing Sheet. However, multiple cost objects can reside in a single Costing Sheet. There are four steps in building the Costing Sheet. Each step requires a different transaction:
- Define Bases Referring to Cost Center and Activity Types
- Define Quantity Based Overhead Rates (There is also a Percentage Based Overhead Rate)
- Define Credits
- Define Costing Sheet (Sets up the Cost Sheet Shell)
- Overhead is then calculated based on the percentage of the base.

26. Conduct Practical Exercises
Show Slide #26: Conduct Practical Exercises
Practical Exercise / Create / Change an Actual Assessment and Distribution in GFEBS (01 Hour 10 Min Apply)
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 01 hrs. / 10 min.
Media: Printed Reference Material, Practical Exercise, Handout
General Information: (Introduction / Objective) this practical exercise simulates a scenario that measures your ability to properly Create and then change an Actual Assessment and Distribution
Special Instructions: N/A 26

27. Walkthrough: Create an Actual Assessment
Transaction Code: KSU1
Conduct Practical Exercise 6.1
Use this procedure to create an actual assessment cycle. Assessments are used to
allocate costs via Secondary Cost. When allocating costs using assessments, the
detail of the primary costs element is not shown. The receiver will only see cost as a
summary level. If the user needs to see costs posted to the receiver object at a
detail line item level use Transaction KSV1 – Create Actual Distribution Cycle.
Perform this procedure; Create an actual assessment cycle, when there is a new
sender cost object.
Show Slide #27: Walkthrough: Create an Actual Assessment:
Facilitator’s Note: Transaction Code KSU1- Student’s will go into the SAP system and execute the said transaction code.
Practical Exercise / Create an Actual Assessment
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 25 min.
Media: Printed Reference Material, Practical Exercise, Handout
Facilitator’s Note:
Walkthrough : Create an Actual Assessment via KSU1. Use this procedure to create an actual assessment cycle. Assessments are used to allocate costs via Secondary Cost. When allocating costs using assessments, the detail of the primary costs element is not shown. The receiver will only see cost as a summary level. If the user needs to see costs posted to the receiver object at a detail line item level use Transaction KSV1 – Create Actual Distribution Cycle. Perform this procedure; Create an actual assessment cycle, when there is a new sender cost object.

28. Walkthrough: Change an Actual Assessment
Transaction Code: KSU2
Conduct Practical Exercise 6.2
Use this procedure to change an actual assessment cycle to reflect revises
Assessment Cycle to reflect revises assessment rules or receiver structure.
Assessment are use to Allocate costs via Secondary Cost Element. When allocating
costs using assessments, the detail of the primary costs elements is not shown. The
receiver will only see cost as a summary level.
Show Slide #28: Walkthrough: Change an Actual Assessment:
Facilitator’s Note: Transaction Code KSU2- Student’s will go into the SAP system and execute the said transaction code.
Practical Exercise / Change an Actual Assessment
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 25 min.
Media: Printed Reference Material, Practical Exercise, Handout
Facilitator’s Note:
Walkthrough: Change an Actual Assessment via KSU2. Use this procedure to change an actual assessment cycle to reflect revises assessment cycle to reflect revises assessment rules or receiver structure. Assessment are use to Allocate costs via Secondary Cost Element. When allocating costs using assessments, the detail of the primary costs elements is not shown. The receiver will only see cost as a summary level.

29. Walkthrough: Create Actual Distribution Cycle
Transaction Code: KSV1
Conduct Practical Exercise 6.4
Use this procedure to create an actual distribution cycle. A distribution is a type of
cost allocation that provides line item detail of primary costs. When allocating costs
using distributions, the detail of the primary cost elements is shown. The receiver
will see cost at a detail line item level. Perform this procedure when you need to
create an actual distribution cycle, or when there is a new sender cost object.
Show Slide #29: Walkthrough: Create Actual Distribution:
Facilitator’s Note: Transaction Code KSV1- Student’s will go into the SAP system and execute the said transaction code.
Practical Exercise / Create an Actual Assessment
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 25 min.
Media: Printed Reference Material, Practical Exercise, Handout
Facilitator’s Note: Transaction Code KSV1. Use this procedure to create an actual distribution cycle. A distribution is a type of cost allocation that provides line item detail of primary
costs. When allocating costs using distributions, the detail of the primary cost elements is shown.
The receiver will see cost at a detail line item level. Perform this procedure when you need to create an actual distribution cycle, or when there is a new sender cost object.

30. Walkthrough: Change Actual Distribution Cycle
Transaction Code: KSV2
Conduct Practical Exercise 6.5
Use this procedure to change an actual distribution cycle to reflect revises distribution
Rules or receiver structure. Distributions are used to allocate costs via Primary Cost
Element. Primary Cost Element has a corresponding account in the General Ledger
(GL) Account. A Distribution will give you line item detail of cost incurred.
Show Slide #30: Walkthrough: Change Actual Distribution Cycle:
Facilitator’s Note: Transaction Code KSV2- Student’s will go into the SAP system and execute the said transaction code.
Practical Exercise / Change Actual Assessment Cycle
Method of Instruction: PE - Practical Exercise (Hands-On/Written)
Facilitator to Learner Ratio: 1:25
Time of Instruction: 00 hrs. / 25 min.
Media: Printed Reference Material, Practical Exercise, Handout
Facilitator’s Note: T-Code KSV2. Use this procedure to change an actual distribution cycle to reflect revises distribution rules or receiver structure. Distributions are used to allocate costs via Primary Cost Element. Primary Cost Element has a corresponding account in the General Ledger (GL) Account. A Distribution will give you line item detail of cost incurred.
Facilitator’s Note: Given Situation: You work for Dining Facility 1 on post. You have been assigned the Cost Allocation Processor role and are responsible for performing activities and tasks related to defining assessment and distribution. You want to display a detailed line item level view of the costs incurred by each unit that uses the dining facility. You must change an Actual Distribution to view the actual costs incurred to each unit on the post.
Step-by-Step: 1. Enter T-Code KSV2 2. Enter The Cycle just created or choose from Drop Down and make changes to it 3. Start Date 4. Click Enter on Keyboard 5. Click  First Segment on Menu Bar to go to the Change Actual Distribution Cycle: Segment screen. 6. Segment Header: If I need to change Sender Values – go to the Segment Header Tab – If I need to change cost center(s), Cost center group, cost element(s), cost element groups, WBS element(s), SKF’s, etc – If I need to change Sender Value (Share in %, Act/Plan value origin), go to Sender Values Tab – If I need to change receiving cost cent’s portion of the cost, go to the Receiver Tracing Factors Tab 7. Once changes are made – Click No check to save changes 8. Look for Informational Message at bottom Left of screen.

31. LSA #2 Check on Learning Q1: When is using an Assessment helpful?
A1: When the user would only like to see a summarized view of the costs
Q2: What appears on the Controlling Document when an Assessment is run?
A2: Sender and Receiver information appears in the Controlling document
Show Slide #31: LSA #2 Check on Learning
NOTE: Read and ask the following check on learning question and facilitate discussion on answers given.
NOTE: The answer to each question will appear when you hit enter.
Q: When is using an Assessment helpful?
A: When the user would only like to see a summarized
view of the costs
Q: What appears on the Controlling Document when an Assessment is run?
A: Sender and Receiver information appears in the
Controlling document
Note: Additional questions for the students:
Q: This is defined as the movement of costs from Sender cost objects to Receiving cost objects.
A: Cost Assignment
Q: What types of costs are assigned using Assessment?
A: Both Primary and Secondary Costs

32. LSA #2 Summary Show Slide #32: LSA #2 Summary
Facilitator's Note: During this lesson, we identified direct activity allocation along with examples of overhead. We defined and discussed the purpose of Costing sheets while executing 4 Practical exercises.
“Or”
NOTE: Have one learner from each group to explain the most important take away to them from this lesson. Facilitate a discussion on each answer.

33. Questions? Show Slide #33: Questions?
Facilitator’s Note: Field questions from the audience.

34. TLO Summary Actions: Determine Cost Assignment
Conditions: You are a Budget Analyst with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors
Standard: With a minimum of 80% accuracy, learners must demonstrate proficiency with:
Identify Cost Assignment Methods
Perform a Direct Activity Allocation
Show Slide #34: Terminal Learning Objective
Facilitator’s Note: Read/State the TLO
Actions: Determine cost Assignment
Conditions: You are a GFEBS data processor with access to a computer, the GFEBS training database, applicable GFEBS references, and awareness of Operational Environment (OE) variables and actors
Standard: With at least 80% accuracy:
- Identify Cost Assignment Methods
- Perform a Direct Activity Allocation